Mentor Graphics reports fiscal Q1 results

WILSONVILLE, USA: Mentor Graphics Corp. has announced results for the fiscal first quarter ending April 30, 2010. For the fiscal first quarter, the company reported revenues of $180.6 million, a non-GAAP loss per share of $.02, and a GAAP loss per share of $.22.

“While the quarter’s bookings were lower than last year due to the concentration of scheduled renewals in the second half of this year, the renewals that did occur in the first quarter were very strong, growing 25 percent from their prior contract values for the renewals within our top ten contracts,” said Walden C. Rhines, CEO and chairman of Mentor Graphics.

“Leading indicators that we have historically tracked were also very positive: support reinstatements grew 70 percent; our base business, orders less than $1 million typically from smaller customers, grew 20 percent over the year ago quarter; and consulting and training bookings grew 25 percent over last year.”

During the quarter, the company extended its customer partnerships with three significant new relationships. Mentor joined the Nano2012 program led by STMicroelectronics, in partnership with the French government, to develop leading-edge technologies for 32nm and below processes.

Freescale Semiconductor named Mentor Graphics its commercial Linux strategic partner. NetLogic Microsystems entered into a strategic collaboration with Mentor Graphics to provide multi-core multi-threaded Linux for their processors.

“Despite two sizeable acquisitions in the last year, our operating expense is still down on an absolute basis year on year. We expect our continued strong emphasis on cost controls, as well as an improving foreign exchange environment, particularly the Euro, positions us well for the year,” said Gregory K. Hinckley, president of Mentor Graphics.

“This fifth consecutive quarter of meeting or beating guidance, given our transparent real-time financial model, gives us confidence that the recovery is continuing.”

During the quarter, Mentor strengthened its offerings to the DO-254 market with a joint announcement of a product flow with The MathWorks, extensions to Mentor’s HDL Designer product to support DO-254 coding standards, and a new product, the ReqTracer tool, that helps automate requirements capture.

The company’s Mechanical Analysis Division launched FloTHERM IC for semiconductor package thermal characterization and design. Mentor launched 3D electromagnetic analysis for its HyperLynx PCB product line. The company completed its previously announced acquisition of Valor Computerized Systems which offers PCB manufacturing software and also acquired technology that provides on-demand electrical schematics for automobile dealerships.

In early May, Mentor launched its Calibre InRoute software, which fully integrates its Calibre tools into its Olympus-SoC place and route environment. This allows designers to invoke Calibre verification and design-for-manufacturing tools from within the place and route environment to verify and improve designs much faster, significantly speeding time to design closure.

In April, the Valor MSS Software suite won the Circuits Assembly New Product Introduction Award and the 2010 Surface Mount Technology Vision Award. Design News granted FloEFD mechanical analysis technology its Golden Mousetrap Award for Best Product.

In February, the International Engineering Consortium honored HyperLynx Power Integrity with its annual Design Vision Award in the System Modeling and Simulation Tool Category. Additionally, Mentor’s Dr. Vladimir Székely received the Dennis Gabor Award for Innovation, the country of Hungary’s highest technical honor.

Outlook
For the fiscal second quarter ending July 31, 2010, the company expects revenues of about $180 million, non-GAAP earnings per share of break-even to a loss of $.05, and GAAP loss per share of $.17 to $.22.

For the full fiscal year 2011, the company expects revenues of $870 million, non-GAAP earnings per share of $.60 to $.65 and GAAP earnings per share of $.10 to $.15.